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Europe Should Step Up By Standing Down

Jul 1, 2008Jim O'Neill
Ten years on, with the euro a resounding success, euro-zone policymakers should seize the initiative in the world’s key economic clubs. They should start by giving up their seats in the G-7 and the IMF, instead acting collectively in these forums while creating space for other important countries.

LONDON – Ten years on, the euro is a resounding success. A financial-market heavyweight, it now outperforms the dollar, the yen, and, until recently, the mighty Chinese yuan, while euro-denominated bond trading rivals the US market in size.

But Europe should be doing better. It should act with greater imagination to unleash more genuine economic freedom and competition, stop championing national enterprises, and start giving the European Central Bank more support. Euro-zone policymakers should also seize the initiative in the world’s key economic clubs.

In particular, members of Europe’s economic and monetary union should give up their seats in the G-7 and the International Monetary Fund. There may be some justification for each EMU state to be represented in the G-8, but not in the main economic organizations. If they volunteered to act collectively at these forums, Europe would free up much-needed space for other important countries at the top table of world economic discussions, which would foster greater respect for global policymakers.

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Jim O'Neill, a former chairman of Goldman Sachs Asset Management and former Commercial Secretary to the UK Treasury, is Honorary Professor of Economics at Manchester University and former Chairman of the Review on Antimicrobial Resistance.